INSTANT VIEW 2-Czech Aug current account gap well above fcast

                                
 PRAGUE, Oct 13 (Reuters) - The Czech current account showed
an 18.11 billion crown ($1.02 billion) deficit in August,
sharply higher than forecasts, due to a deficit on the income
balance, including dividend payments by foreign-owned companies.
                                
 Analysts in a Reuters poll had forecast a 12.4 billion crown
shortfall.
                                
 The Czech central bank data showed the volume of dividends
paid by Czech companies to their foreign owners in August
amounted to 15.7 billion crowns in August.
                                
 The rolling 12-month deficit grew to 75.30 billion crowns,
equal to about 2.0 percent of estimated 2010 gross domestic
product, according to Reuters calculations.
                                
 The data also showed foreign direct investment inflow of
12.1 billion, of which net reinvested earnings were 6.4 billion
crowns.
  
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KEY POINTS:
(CZK billions)           Aug           July          Aug fcast
Current Account         -18.11        -32.53        -12.4
Financial Account        21.42         33.36          n/a
Net Direct Investment    12.11         24.29          n/a

 (For full table, double click on [ID:nPRA005285])

COMMENTARY:
                                
 PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT PRAGUE
                                
 "The main negative aspect is the income balance, which
corresponds to what happened in the past months."
                                
 "The important thing is that the current account deficit is
covered by the inflow of money on the financial account, so
there is no problem with external financing."
                                
 
                                
 MARKET REACTION:
The crown <EURCZK=> firmed to 24.490 per euro from 24.505 before
the data released.


DETAILS
- The output balance (goods and services) ran a modest surplus.
- Current transfers include net transfers of 3.9 billion crowns
from the EU budget.
- The capital account includes transfers of 10.1 billion crowns
from the EU budget and 0.5 billion crowns from the sale of
emission permits.
- The annual current account deficit total has increased at a
longer-term horizon.
- Capital inflow on the financial account was 21.4 billion
crowns under ECB methodology.
- The net inflow of direct investment reached 12.1 billion
crowns, of which net reinvested earnings were 6.4 billion
crowns.
- The surplus of 15.9 billion crowns on portfolio investment was
due to a decline in holdings of foreign securities in the
portfolio of Czech investors and due to purchases of shares and
crown bonds by foreign investors.
- The annual direct investment inflow total, the longer-running
trend, has been increasing.
- The annual portfolio investment total, the longer-running
trend, has recorded a rising inflow of funds.
- Other investment showed a modest surplus of 2 billion crowns,
owing to a change in the short-term international position of
banks.
- The central bank's international reserves, adjusted for
valuation changes, rose by 8.9 billion crowns in the reserves.
                                
     
 BACKGROUND:
- Analyst expectations before data release       [ID:nLDE6900ON]
- Czech August foreign trade figures             [ID:nLDE69605P]
- Polish August C/A data                         [ID:nLDE69B1GE]
- Slovak July C/A data                           [ID:nPRA005261]
- Hungary's Q2 C/A data                          [ID:nLDE68T0BJ]
- Report on last Czech c.bank rate decision......[ID:nLDE68M1CY]
                                
              [ID:nPRA005256] [ID:nPRG004388] [ID:nPRG004399]

 LINKS:
- For further details on August of payments numbers and past
data, Reuters 3000 Xtra users can click on the Czech National
Bank's website:
                                
 http://www.cnb.cz/en/statistics/bop_stat/

- For LIVE Czech economic data releases, click on       <ECONCZ>
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- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH]
- For Czech money markets data click on                <CZKVIEW>
- Czech money guide                                      <CZK/1>
- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jana Mlcochova; editing by Patrick Graham)